challenges of t he h ungarian agriculture and european union accession
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Challenges of the Hungarian agriculture and European Union accession
Jozsef Molnar Szent Istvan University
The role of agriculture
Agriculture is still a significant sector trough:
rural development maintaining of rural population environment protection utilisation of natural resources sustaining of cultivated landscape preserve of traditional culture and rural values
GDP % Export %Employment
%
1989 13,7 22,8 17,4
1995 5,9 22,0 8,0
2002 3,3 6,8 5,5Source: Hungarian Central Statistical Office
Economic importance of agriculture
Potential of agriculture
Elements of production possibilities:
• abundant and high quality soil
• good climatic conditions
• skilled and “cheap” labour
• high level education and research
• good experiences and traditions
20012001
1 000 ha1 000 ha in %in %
Arable land 4 516,1 48,5
Garden 97,7 1,1
Orchar 97,5 1,0
Vine yard 92,9 1,0
Grassland 1 061,2 11,4
Agricultural areaAgricultural area 5 865,45 865,4 63,063,0
Forest 1 771,7 19,0
Reed 60,3 0,6
Fish pond 32,2 0,3
Productive land Productive land areaarea
7 729,67 729,6 83,183,1
Unucultivated area 1 573,8 16,9
TotalTotal 9 303,49 303,4 100,0100,0Source: Hungarian Central Statistical Office
Land area by land use category
Effect of EU accession
The long term effect of EU accession basicly depends on two factors:• the current circumstances which determine our future possibilities
• conditions of the Accession Traitee (quotas, subsidy framework) and the continuing changes in the CAP
Current circumstances
• Radical decrease in production
• Unfavorable production structure
• Shifting labour market
• Fundamental change of ownership and farm structure
• Changing market environment
Decrease of agricultural production
50
60
70
80
90
100
110
1991 1993 1995 1997 1999 2001
Total Agricultural production
Crop production
Animal husbandry
Unfavorable production structure• The ratio of crop production to livestock
has changed• In the crop production, too high rate of
cereals.• Too low level of value-added
Denomination 2001 2002 2003
Cereals % 73,5 70,4 68,7
Industrial plants % 10,9 13,8 14,9
Sugar-beet % 1,6 1,3 1,3
Potato % 0,9 0,8 0,8
Vegetables % 2,1 2,5 2,5
Change of livestock volume
1986-89 1995 1999 2003
Catle (total) 1950 928 857 714
Pigs (total) 8178 5032 5335 4658
Sheep (total) 2165 977 934 1281
Checkem and foul 55093 31458 25890 34758
Change of agricultural employment
Employees in agriculture
Of wich, those employed in cooperatives
1000
1989 837 610
1992 460 176
1995 295 66
1997 288 60
2001 239 29
Change of ownership
1990 2003
State 34 10
Cooperative 31 3
Private 35 83
1990 2003
State 32 10
Cooperative 61 8
Private 7 82
The privatisation which has took place in the nineties, has concerned about 75 % of land area (5,7 million ha). As a result of diverse privatisation methods, about 2,5 million private entities have became landed proprietors. The average land size is 3,2 ha.
Change of land use
The present tendency:
- land property is dividing (inheritance),
- land use is more and more concentrated (lease system).
Land can only be owned by private entity and only by Hungarian citizen. Firms, cooporations and foreigners can’t become land proprietors.
The determinant form of land use is lease. At present, 63,5 % of arable land classed among lease system.
BUT REMEMBER!
Number of registered private farms.
Year Number of farmsAverage land
size
2000 958 000 2,8 ha
2003 765 000 3,3 ha
Number of enterprices
YearNumber of economic
associationsAverage land size
2000 5 392 000 711 ha
2003 6 891 000 503 ha
Farm structure
Country
Farms made to size
Average plant size
(ha)
< 5 ha
5-50 ha
50-100 ha
>100 ha
< 5 ha5-50 ha
50-100 ha
>100 ha
Numerical ratio % Land proprtion
Hungary 89,9 9,3 0,8 22,5 46,7 30,8 6,7
Austria 36,4 59,1 3,0 1,5 5,2 32,5 11,6 25,1 17,0
Denmark 3,5 66,1 19,9 10,7 0,2 9,1 30,6 39,0 45,8
Germany 24,9 58,4 11,5 5,2 1,7 12,3 21,8 44,3 36,3
France 29,1 40,6 18,4 11,9 1,3 6,6 31,1 45,6 42,0
Portugal 78,8 18,8 1,0 1,4 13,8 29,6 7,4 52,7 9,3
EU-15 57,6 33,5 5,5 3,5 5,2 31,0 20,3 43,5 18,4
Landsize and land use structure compared with some EU members
SummaryComplex situation with clear tendencies:• ownership de-concentration• use centralization• social problems• unfavorable starting conditions
– low level of production– weak competitiveness– unformed farm structure– low profitability and technical level– weak interest articulation
• Unfavorable accession positions– low quotas– discriminations of subsidies (25%)– changing CAP (moving target…)
The stipulations figured in Accession Traitee and the uncertainty of CAP reform damage the external conditions:
- the hungarian farmers are disappointed about quota, basic and especially subsidisation rate (25%),
- there is an internal contradiction of Accession Traitee and CAP reform ( 3 different theorial construction type concerning direct subsidisation),
- after mathematical models, the growth of direct subsidisation doesn’t cover the cost increment.
The EU accession will surely select among farmers, there will be winner and loser. It would be better to have more winner than loser.
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